Anaheim Property Management Blog

Better tenants make for more satisfied owners and more profitable property management companies. A bad tenant, one that does not abide by the contract, does not pay as agreed, violates the terms of the contract, or is just a bad neighbor, is a nuisance to all. Although there may be no "fail safe" method of selecting a tenant for your property, after many years in the business experimenting with many factors in weighing a potential tenant, we have developed and embraced the "Better Tenant System". The operative word in this phrase is "system". We apply this policy to every applicant for every property. Our eviction rate is 1% of all placed tenants because of this system. There are 5 parts of the "Better Tenant System": 1) Throw a Wide Net - Attract the greatest number of applicants to your property. We use the MLS, Craigslist, our website and every reasonable marketing tool at our disposal to get the greatset number of potential tenants interested in your property. We realize that if you have fewer applicants, you have fewer choices. 2) Consider Credible Credit - Use common sense to determine acceptable credit. Most of your applicants will not have perfect credit. Many will have lates pays, a good number will have bankruptcies and a few will have foresclosures and short pays. This shouldn't automatically eliminate them from consideration. A bankruptcy is not necessarily good for creditors, but it does eliminate debt for the applicant and they can't file bankruptcy again for a number of years. More importantly, what are their current balances? What kind of judgments and public records do they have? Have they paid their bills as agreed for the past 2 years? 3) Find Positive Cash Flow - Determine their capacity to pay the proposed rent. Probably the most important factor in considering an applicant is their ability to make the monthly lease payment. We verify their monthly income and expect the gross income (income before taxes and deductions) to be three times the monthly rent. If they are salaried, we require copies of recent paycheck stubs. If they are self employed, we want the front of their 1040s which show the schedule c income. If they have a number of income earners, we require documentation for each person and they must go on the lease. 4) What's the Story? - Why are they seeking to lease your property? No matter how nice your property, I suspect the tenants would rather own a beach front property on the coast of California and not rent your home. Did they pay as agreed at their last property? How did they treat their former property? Why are they moving? Why are they moving to this area? Do they have a criminal background (we run this report on every applicant)? How long do they intend to stay? Everyone has a story, and it is important you don't rent to someone just because they apply, you rent to someone with a reasonable story as to their desire to lease your property. 5) Keep to the Contract - Keep to the letter of the contract. We make it clear to the applicant we approve to reside in your property that we will be holding them to every letter of the contract and if they choose to violate that contract, they will be evicted. There is no gray area. There is no negotiating. If they abide by the contract, they may consider your home their home and they may stay there happily for many years. If they don't, they will be out forthwith. That's our system. That's how was can manage more properties more efficiently. One bad tenant can occupy the time of 9 good ones, and we use this system to recognize the good tenants and avoid the bad ones.